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Sept. 3, 2024, 9 a.m.
Hawai'i County Building
To: Hawaii County Council, Committee on Planning, Land Use, and Development
Ashley Kierkiewicz, Chair
Holeka Goro Inaba, Vice -Chair
From: Joe Kent, Executive Vice President
Grassroot Institute of Hawaii
RE: Bill 121 — RELATING TO TRANSIENT ACCOMMODATION RENTALS AND HOSTING PLATFORMS
Aloha Chair Kierkiewicz, Vice -Chair Inaba and other members of the Committee,
The Grassroot Institute of Hawaii has concerns with Bill 121, Draft 3, which would replace the existing
regulations on short-term rentals with a new set of regulations covering owner -hosted, operator -hosted and
unhosted STRs.
We are concerned about the effect this measure might have on existing STIR operators, small businesses and
the broader Hawaii Island economy, and we would urge that the county commission an economic analysis of
the short-term rental industry in Hawai'i County before acting on this bill.
For example, a 2020 study commissioned by the Hawaii Tourism Authority discovered that STRs are generally
less expensive than hotels, and that "30% respondents reported that if there was not a home and vacation
rental option during their recent stay in Hawaii, they would not have made the trip.."'
The study did not look at Hawaii Island specifically, but it did find that STRs added $6 billion to the state's
economy and sustained 46,000 jobs.'
' "Hawaii's Home and Vacation Rental Marken Impact and Outlook," prepared for the Hawaii Tourism Authority by JLL's Hotels &
Hospitality Group, April 20, 2020, p. 10.
Ibid. D. 4.
1050 Bishop St. #S08 Honolulu, HI 96813 808-864-1776 Comm. No. U � - 41q
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TheHTAstudva|sosurveyedpeop|estatexvidevvhoovvnshort-tenmrenta|sandfoundthat"7OY6ofresidents
who indicated that they make their living unit available for home and vacation rentals report that they do so to
either make incremental income or meet housing gaps (40% and 30%, respectively).'
Further: "Responses in 2019 track with reasons and proportions provided by respondents in 2016, where 60%
of respondents indicated that they make their living unit available for home and vacation rentals to subsidize
housing costs. The increased proportion can be partly explained by the ongoing rise in housing costs in
Havvaii"3
The H7Astudy indicated that many existing STRhosts--xvhomayberentoutaroonnorasecondunitontheir
property — use their STR income to afford Hawaii's high cost of housing.
These existing hosted STRs also offer everyday folks the opportunity to participate in Hawaii's tourism
economy and build wealth for their families.
Grassroot also is concerned about the steep fines that would be imposed on those who would violate this
proposed new law. The proposed $10,000-per-day fines could quickly add up to an unpayable amount — and
even result in the owners losing their homes toforeclosures. Not only would such a fine be excessively harsh,
but itcould beunconstitutional.
Both the state and federal constitutions bar excessive fines, and the U.S.Supreme Court'sdecision inTinnbsu
Indiana establishes that the federal excessive fines clause applies to state and municipal actions as well.'
Recent cases, such as Tyler v. Hennepin County,' indicate that courts are increasingly prepared to strike down
aggressive state action that impairs individual property rights. Thus, we suggest that the penalties associated
with noncompliance be reconsidered and restructured.
Thank you for the opportunity to testify.
Executive Vice President
GressnootInstitute ofHawaii
`"Hawaii's Home and Vacation Rental Market: ImDact and prepared for the Hawaii Tourism Authority by]usHotels &
Hospitality Group, April 20, 2030 p. 16.
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zVsOBishop St. wsoo *onouhu,mseuz3 808-8641776 info@grassrootinstitute.org